Indian diplomat Devyani Khobragade leaves with her father Uttam Khobragade from the Maharashtra Sadan state guesthouse to meet India's Foreign Minister Salman Khurshid in New Delhi on January 11, 2014.

Devyani Khobragade, the Indian diplomat at the center of a controversial spat between the world’s two largest democracies, returned to India at the end of last week, leaving her family and a grand jury indictment behind in the U.S. Khobragade, India’s deputy consul in New York City, was arrested Dec. 12 on charges of visa fraud and making false statements regarding the employment of her live-in domestic worker, to the shock of Indian officials who insisted upon her immunity. Reports of her treatment by New York police — which included a strip search — stung Indian national pride and drew the ire of Indian media, spurring New Delhi to take various retaliatory measures against U.S. diplomats posted in India. The impasse ended after the U.S. accepted Khobragade’s right to immunity, but immediately requested it be waived because of the existing case against her; New Delhi’s predicted refusal of that request led to her forced departure from New York.

Even if Khobragade’s repatriation brings closure to what’s been a tortuous, monthlong saga — and there are signs that it may not — analysts warn of the damage it’s already done to ties between the two countries. “It’s the most serious strain in the relationship since 1998, when India tested its nuclear weapons,” says Sadanand Dhume, resident fellow and South Asia expert at the American Enterprise Institute in Washington. “And we don’t know yet how far the fallout will reach.”

It may bemuse Americans that a diplomat’s brief detention could generate as much discord as the explosion of an atomic device. But the Khobragade crisis exposed lingering fault lines in the U.S.-India relationship, one that has grown leaps and bounds in the past decade and which officials on both sides routinely hail as vital. “It showed that [the two countries] look at each other still through very different lenses,” says Persis Khambatta, a fellow at the Center for Strategic and International Studies (CSIS) in Washington. “And it’s not as rosy a picture as they might have hoped.”

Attention in the U.S. has focused on Khobragade’s alleged mistreatment of her maid, Sangeeta Richard, who was brought from India on a salary that many Indians consider fair, but whose plight, to the indignation of New Delhi, has been characterized by prosecutors as a form of human trafficking. The anger in India has less to do with the particularities of the case and more with the public and humiliating way in which the events proceeded. It didn’t help matters that the Indian diplomat who was strip-searched was a woman, prompting outrage in the Indian media over an American violation of India’s national honor.

“No one is questioning that she may be guilty in this particular case, but the treatment of the diplomat was just not right,” says Seema Sirohi, an Indian journalist and commentator based in Washington. “Things could have been managed very differently.” Indians are quick to point to the zeal with which the U.S. defends its own people abroad, even when they are guilty of far greater crimes. Just a few years ago in neighboring Pakistan, Raymond Davis, an American contracted to the consulate in Lahore, killed two people allegedly pursuing him, but had his charges dropped by Pakistani authorities after intense American pressure.

In an interview on Indian television this weekend, Indian Foreign Minister Salman Khurshid complained that the U.S. had not adequately made clear the gravity of the investigation to Indian officials, including the country’s Foreign Secretary, who was in Washington around the time of Khobragade’s arrest, which could have led to a quieter, quicker diplomatic solution. Khurshid has reason to feel chagrined: earlier in the year, Edward Snowden’s leaked documents on NSA spying indicated India was the “fifth most” snooped-on country. But Khurshid, at the time, played down the news, even while his counterparts in Europe and Latin America found cause to upbraid Uncle Sam.

The current imbroglio also stirred long-standing Cold War–era resentments over American bullying and lack of respect. “Make no mistake,” writes Brahma Chellaney, a leading Indian geostrategic analyst, “America would not have dared to arrest and strip-search a Chinese or Russian diplomat for allegedly underpaying a maid, because it would have invited swift and disproportionate retaliation.” The retaliatory actions India did take in the past weeks — which included removing security barricades from outside the U.S. embassy in New Delhi and barring U.S. officials posted in India access to duty-free liquor — smacked of a kind of petty “meekness,” Chellaney suggests.

The long-term effects of the Khobragade crisis are difficult to divine. A major sign that things are getting back on track, says Dhume of the American Enterprise Institute, would be the resumption of meetings between high-level officials in both governments. The news, at present, isn’t good: last week, U.S. Energy Secretary Ernest Moniz pulled out of a planned visit to India in light of the ongoing spat. “It’ll take a long time for the trust and understanding to be rebuilt,” says Sirohi.

Moreover, there’s a sense that India’s centrality to U.S. policy has slipped in recent years, with the Obama Administration more distracted by crises in the Middle East and more wary of alienating China than the Bush Administration, which seemed to embrace New Delhi as a counterweight to Beijing to the east and forces of Islamist extremism to the west. “The current Administration has been doing just enough in its dealings with India to avoid looking complacent,” says Dhume. “It’s harder to imagine the State Department [under Bush] letting the diplomatic crisis that we just saw get so out of hand.”

Still, the fundamentals of a solid partnership remain, with considerable private-sector ties and a very active and affluent Indian diaspora growing in stature in the U.S. Despite the differences that emerged in the past month, the two countries are tethered by shared principles, which will be put to the test as the U.S. pursues its “pivot” toward the Asia-Pacific region. “They are both democracies. They both share a view of a pluralistic Asia that is not dominated by one country,” says Dhume.

On the chessboard of geopolitics, then, Khobragade’s arrest may in the long term be insignificant. But the stink it has caused will take time to diffuse. “There’s a sense that this was a very avoidable circumstance,” says Khambatta, of CSIS. “It’s regrettable that India-US relations could take such a hit over what’s ultimately a small incident.”